Social Networking Goes Mobile

SUMMARY

Overview

Social networking sites like MySpace and Facebook have emerged recently as some of the hottest names on the Internet, with daily news reports of new partnerships, advertising initiatives and acquisition activity. Indeed, several of the top five social networking sites - MySpace, Facebook, Hi5, Orkut and Friendster - rank among the top 10 most-visited websites globally. Unsurprisingly, the growth in interest in social networking has led to a number of important deals by major online brands and media firms. These include News Corp's July 2005 acquisition of MySpace for US$580m and more recently Microsoft's purchase of a 1.6% stake in Facebook for $240m, a purchase price that values the entire company, which has annual revenue of some $100-150m, at an impressive $15bn. The report Social Networking Goes Mobile by Pyramid Research looks at the social networking business model and analyzes its future, including forecasting the number of social networking members expected globally by 2012. In addition, this executive-level report assesses the current and future state of mobile social networking, whereby members access their favorite sites using their mobile devices. In particular we analyze the rationale for both stakeholder groups - the social networking sites and the mobile operators - for collaborating to offer mobile social networking services, including the revenue mobile operators can gain from adding social networking to their offerings. We also profile some of the top players in the mobile social networking world, including mobile operators, social networking sites and software developers working to enable this shared future.

Key questions answered

• How do social networking services fit into the larger online media landscape today?
• How are social networking services spreading across the globe?
• What role will mobility play for social networks, and what role will social networking services play for mobile operators?
• What benefits will mobile network operators and social networking service providers find in working together?
• Will advertising, subscription fees or premium, “extra” services dominate the social networking business model?
• How large is the revenue opportunity?

Target audience

Mobile operators globally

Quantify the opportunity in social networking services, and assess your strengths in building an effective strategy to create or expand your social networking-based revenue streams. Evaluate the optimal model for partnering with social networking service providers. Develop a revenue model for social networking services that fits into you larger mobile data revenue strategy, examining advertising, subscription fees and premium services. Devise tactics to counter social networking moves by competitors.

Social network service providers

Assess the optimal strategy to tackle the mobile market for social networking. Find out the projected growth in social networking usage and the factors driving it. Quantify the mobile social networking market's size. Discover what makes it different from social networking on the fixed Internet and how to make it attractive to advertisers. Evaluate how best to form partnerships with mobile operators.

Investors and financial institutions

This report will help you assess the long-term financial prospects of mobile social network services for both providers and operators globally. Use Pyramid Research's forecasts of metrics such as mobile subscribers, mobile advertising revenue and social networking revenue to focus investments in growth areas.

TABLE OF CONTENTS

Acronyms and abbreviations

Companies mentioned in this report

Executive summary

Section 1: Defining the terms: what is social networking?

• 1.1 Web 2.0
• 1.2 What is social networking?
• 1.3 Social networking goes international
• 1.4 The impact of social networking on user behavior

Section 2: Understanding the social networking business model

• 2.1 How do SNSs make money?
• 2.2 Will Google change the rules for social networking?

Section 3: Social networking in a mobile world

• 3.1 What are the forces bringing mobile operators and social networking sites together?
• 3.2 Drivers and inhibitors of mobile social networking

Section 4: Mobile operator initiatives in the social networking space

• 4.1 The flat rate, open-access model
• 4.2 The partnership model
• 4.3 The proprietary community
• 4.4 Operator social networking initiatives
• 4.5 Can mobile social networking users reach 1bn?

Section 5: Understanding the mobile social networking business model

• 5.1 Advertising
• 5.2 Mobile access to social networking sites
• 5.3 Monthly subscription fees
• 5.4 Usage charges
• 5.5 Other potential revenue sources

Section 6: Company profiles

• 6.1 T-Mobile: Web'n'walk is linchpin in social networking strategy
• 6.2 SeeMeTV: A successful proprietary community today, but for how long?
• 6.3 Facebook: Making advertising social
• 6.4 Ovi: Nokia's door to the Web
• 6.5 Intercasting: The mobile social networking aggregator

Section 7: Conclusions

Additional resources

Table of exhibits

• Exhibit 1: Active social networking users worldwide, by site (530m total)
• Exhibit 2: Overview of top five social networking sites, 2007
• Exhibit 3: Facebook registered users, 2004-2007
• Exhibit 4: Worldwide active SNS members, 2006-2010
• Exhibit 5: A selection of leading 'homegrown' social networking sites
• Exhibit 6: Top 10 online activities of European Internet users
• Exhibit 7: Impact of the Internet on other user activities
• Exhibit 8: Major SNS business models
• Exhibit 9: Top 10 sites on the Web (January 2008)
• Exhibit 10: Worldwide mobile users versus worldwide Internet users, 2006-2012
• Exhibit 11: Forces driving and inhibiting mobile social networking
• Exhibit 12: Mobile bandwidth available to subscribers is on the rise
• Exhibit 13: Leading mobile operators' social networking initiatives, as of January 2008
• Exhibit 14: Mobile social networking users globally, 2006-2012
• Exhibit 15: Following the money; sources of revenue
• Exhibit 16: Current and future addressable opportunity for US mobile operators in mobile social networking
• Exhibit 17: T-Mobile UK's 12-month web'n'walk offers
• Exhibit 18: Ovi serves as media and communications dashboard across devices and access platforms
• Exhibit 19: Intercasting's Anthem platform